LAST week, we highlighted that extended warranty has too many exclusionary clauses sometimes making the extended warranty useless. The selling of extended warranty by regular paid employees for a commission was also highlighted.
This week you will read that a local hire-purchase company is selling manufacturer's warranty as extended warranty depriving consumers in Fiji from taking full advantage of manufacturer's warranty as enjoyed by consumers in other countries.
Sale of manufacturer's warranty
The HP companies are legally required to adhere to manufacturer's warranty since they are the suppliers of the products. Warranties provide a legally-binding assurance that any problems caused by manufacturing defects during a specified period will be remedied. However, the hire-purchase report revealed that some HP companies fail to honor manufacturer's warranty period and cheat the consumers. These companies sell manufacturer's warranty as extended warranty which is of grave concern to the Council.
For Example: The Fisher & Paykel 172L F/Freezer 169TR has a two-year comprehensive warranty, a five-year rust free warranty and a five-year sealed system (parts only) warranty from the manufacturer. However, the same product under a local hire-purchase company warranty is for 12 months only. What happens to the other 12 months warranty which the manufacturer had provided? Unfortunately this is not given to consumers or if consumers want "peace of mind" then they have to buy extended warranty for additional years.
In all cases where manufacturers provide a warranty of over 12 months, this particular HP company sells the manufacturer's warranty for any period over one year to consumers as 'extended warranty'.
Consumers buy extended warranty for their 'peace of mind' but in fact it is another profit centre for the dealers where consumers have to pay for every small cost incurred despite buying extended warranty for further protection. These include cost of inspection, transportation, parts, repairs etc.
Thus in actual fact, the extended warranty does not give a "peace of mind" but leads to frustration instead.
Under the extended warranty, consumers cannot take their product to more skilled technicians than those with the dealer. The call on the cost of attending to the invocation of the warranty is made by the dealer. The research has found that selling of extended warranty generates an estimate of $1.013m revenue annually.
This is approximately 4 per cent of the total credit which is extended to consumers.
Confusion over extended warranty
The report further highlights the absence of full disclosure of the terms and conditions of both manufacturer's warranty and extended warranty. These disclosures are not provided by the HP dealers to enable consumers to make informed decisions. Even cash buyers are not specifically advised of the terms and conditions of a warranty. Until consumers particularly ask about warranties, they are not even advised by the dealer that the product comes with a warranty.
The following case study shows how a supplier disregards manufacturer's warranty period.
Mr X bought a water blaster that had a three-month warranty. After using it twice on two separate occasions, he discovered that the water pressure was low and it was not working the way it should have or as expected of a new product. This all happened within the first month of the warranty period of the product. Mr X then took the item back to the supplier hoping that they would either fix the problem or replace the product for one in working condition.
Unfortunately, the supplier took about two months to have the item completely repaired and by this time, Mr X's warranty period had already expired.
According to the supplier, the part that was needed to fix Mr X's water blaster had to be brought in from overseas, which was why it had taken so long to be repaired. The supplier then asked Mr X to pay for the repairs because the warranty had expired.
Not convinced with the explanation given by the supplier, Mr X brought his case to the Consumer Council of Fiji.
Mr X returned his water blaster within the first month of the warranty period. The product was not functioning in the way that a reasonable person would expect it to, and the supplier was alerted to this well within the warranty period.
The fact that the repairs took so long due to which the warranty period had expired does not prevent the product from being covered by the warranty as it was returned to the supplier within the time period covered by the warranty.
It must be noted that in order to make a claim for any defective products you must make a claim within the time periods and in the ways stated in the warranties.
Invoking your consumer rights is never easy. You are often told that "warranty has expired". This argument is frequently used to avoid providing redress by the credit providers. However, you must know that any warranty offered by the supplier/retailer, is in addition to the statutory responsibilities under the Sale of Goods Act.
* This is a weekly contribution from the Consumer Council of Fiji